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070060023 ÖZGE DUMAN
070060162 GÖZDE UTAR
070070029 MUSTAFA HATIPOĞLU
CONVERSE: WE
LOVE YOU
CHUCKS
HISTORY
Founded in 1908 in North Reading,
Massachusetts by Marquis
Introduced in 1917 “Converse All
Star “
Renamed in 1923 the “Chuck Taylor
( known as Chucks)”
Introduced in 1923 the first
Chucks
 Wore extremely in 30s, 40s,50s
and 60s
HISTORY
 Started to product by the early of
1980s tennis and running shoes
 Was official shoe of NBA early 90s
 Had changed its strategy by 1993
 Cancelled in 1992 “Made in USA.”
label
 Nike bought it in 2003
 Signed with Dwyane Wade an
agreement in 2005 for 7 years
Some of Converse Celebrities
“They are everywhere”
SWOT ANALYSIS
STRENGTHS
 Strong Brand Name
 Affordable
 Endorsed by famous stars
 Official shoe of NBA
 Wide variety of colors and shoes
 Very creative and different fashion
styles
 Created eloborately in the
laborataries by designers, engineers
and biomechanics experts
 Has talented designers
 Manufacturing men’s and Woman’s
clothing, “product development”
SWOT ANALYSIS
WEAKNESSES
 Focusing on a particular segment
of people
 Basic shoes
 Deforms easily
 Antiestablishment image like
skateboarders from public
 Using wrong stars for
advertisements such as Dr. J.
SWOT ANALYSIS
OPPORTUNITIES
 Nostalgia, retro, punk rock
trends
 Street kids wearing on the
streets
 Reflecting antiglobalization
perspective.
 Secondary firm of Nike
SWOT ANALYSIS
THREATS
 Strong competitors in the market
like Nike (26%) and Reebok (23%)
 Secondary firm of Nike
 Losing treasured “ Made in USA”
label
 Unpleasured old guard of Converse
QUESTION 1:
What are the core,actual
and augmented product
benefits of the Converse
Chuck?
THE TREE LEVELS OF A
PRODUCT
CORE BENEFITS
Core benefits indicate the fundamental
level of what a product really provides to
its customers. It can also be named as
core problem solving benefits answer the
question of „‟what is the buyer really
buying?‟‟ When we examine the converse
chuck they are basic shoes usually with
canvas lace ups and rubber covered toes.
In the perspective of customers
converse chucks are not shoes they get
freedom to walk on outside by the
difference of wearing converse.
ACTUAL PRODUCT BENEFITS
Actual product benefits include
features, design, packaging,
brand name and quality level. All
together these benefits support
the core benefits to satisfy
customer. Actual product
benefits carry product far more
than just being a problem
solving.
Features: At the birth of converse
they are basic shoes after the
takeover of the Nike Converse has
become focused on fashionable styles.
Design: Generally black, white and red
rubber toes, a blue label on the back
“Made in USA” after Nike 12-people
design team work
Packaging: basically not applicable just
shoe boxes
Brand Name:”Converse All Stars”
known as “Chucks”
Quality: Basic shoes and also qualified
by NBA
AUGMENTED PRODUCT
BENEFITS
Augmented product benefits
involve that installation,
warranty, delivery and credit
after sale service. Converse
offers additional customer
services to satisfy its consumers.
It allows customers to design
their own converse.
QUESTION 2:
When Converse
outsourced production of
its shoes to India,it
entered into a licensing
arrengement. What are
the benefits and risks of
that action? Do you think
it has helped or hurt the
company? The brand?
BENEFITS OF ACTION
1.Cost Reduction
2.The possibility of utilizing
cheaper labor cost
3.Possibility of getting into new
markets easily
4.Less promotional effort for
Indian markets
5.Increase productivity by
restructuring itself
RISKS
1.The loss of “Made in USA label
leads to an uncomfortable
situation in the organization
2.Possibility of emerging new
competitors “imitators”
3.Uncertainties about new
manufacturing place
4.Change of organizational
structure “resistance”
5.New product line All stars
2000 can be a “venture”
COMMENT ON ACTION
Although sending
manufacturing to India
poses considerable risks All
Stars 2000 collection has
become successful. It has
helped company to recover a
little bit. The brand also
renewed by the All Star
2000 collection
QUESTION 3:
What are the sources of
brand equity for both
Converse and Chuck
Taylor All Stars?
Official shoe of NBA
Kurt Cobain and famous stars wear
it
Accepted by all social classes
Have loyal costumers who don’t wear
any sneakers except for Converse
Make the foot relax
 Before 1990: “Made in USA”
A lovemark
Sponsoring Olympics
Retro trend and punk rock movement
Affordable
QUESTON 4:
Analyze the Nike-era
direction of Converse. (a)
Assess the benefits and
risks of the fashion and
performance strategies
individually, and of the
combined two-tiered
approach. (b) What
targeting and positioning
would you recommend for
the Converse brand in the
future?
Before Nike to rescue, company had 180
employees and the sales of 185 millon
dollars. „Dying brand‟
Nike observers believed that Converse
should become a second tier brand.
 Nike raises promotional expenses from
$4 million to $17 million in 2005
However, Exeter Brand Group filled that
gap which is selling cheaper shoes Wal-
Mart and Target.
 The popularity of Converse in basketball
areas was falling down until Nike signed
agreement with Dwayne Wade under the
“Wade” collection and then gained its
popularity again with promising sales.
Wade bundled with a special edition of
the classic Converse Pro Leather. This
idea comes from “Dr. J” Erving
Benefits:
 Market share increased
 Wide range of Converse types enable
costumers to choose comfortably
 12 person design team improves quality
and enlarges the models
 Entering into clothing fields can be
benefical because of reaching much more
costumers.
Risk:
Old fans of Converse
dissatisfied with the new
image .There is a
possibility of losing
Chuck Taylor customer
base.
Comments&Recommendations
After Nike takeover of Converse
Converse brand has gone under substantial
change and became more fashionable therefore
possible targets for Converse should be
Upper class society who responses more pricey
models correctly
Tennis players and athlets :Main focus just
basketball players
Converse In Turkey
1987: Conteks has the selling license of
Converse
4th in Europe (After France, Italy,
Germany)
Target Market: Teenagers
15.000 sales in 2001
1.300.000 sales in 2007
THANKS FOR
LISTENING

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Converse Case Study

  • 1. 070060023 ÖZGE DUMAN 070060162 GÖZDE UTAR 070070029 MUSTAFA HATIPOĞLU CONVERSE: WE LOVE YOU CHUCKS
  • 2. HISTORY Founded in 1908 in North Reading, Massachusetts by Marquis Introduced in 1917 “Converse All Star “ Renamed in 1923 the “Chuck Taylor ( known as Chucks)” Introduced in 1923 the first Chucks  Wore extremely in 30s, 40s,50s and 60s
  • 3. HISTORY  Started to product by the early of 1980s tennis and running shoes  Was official shoe of NBA early 90s  Had changed its strategy by 1993  Cancelled in 1992 “Made in USA.” label  Nike bought it in 2003  Signed with Dwyane Wade an agreement in 2005 for 7 years
  • 4. Some of Converse Celebrities “They are everywhere”
  • 5. SWOT ANALYSIS STRENGTHS  Strong Brand Name  Affordable  Endorsed by famous stars  Official shoe of NBA  Wide variety of colors and shoes  Very creative and different fashion styles  Created eloborately in the laborataries by designers, engineers and biomechanics experts  Has talented designers  Manufacturing men’s and Woman’s clothing, “product development”
  • 6. SWOT ANALYSIS WEAKNESSES  Focusing on a particular segment of people  Basic shoes  Deforms easily  Antiestablishment image like skateboarders from public  Using wrong stars for advertisements such as Dr. J.
  • 7. SWOT ANALYSIS OPPORTUNITIES  Nostalgia, retro, punk rock trends  Street kids wearing on the streets  Reflecting antiglobalization perspective.  Secondary firm of Nike
  • 8. SWOT ANALYSIS THREATS  Strong competitors in the market like Nike (26%) and Reebok (23%)  Secondary firm of Nike  Losing treasured “ Made in USA” label  Unpleasured old guard of Converse
  • 9. QUESTION 1: What are the core,actual and augmented product benefits of the Converse Chuck?
  • 10. THE TREE LEVELS OF A PRODUCT
  • 11. CORE BENEFITS Core benefits indicate the fundamental level of what a product really provides to its customers. It can also be named as core problem solving benefits answer the question of „‟what is the buyer really buying?‟‟ When we examine the converse chuck they are basic shoes usually with canvas lace ups and rubber covered toes. In the perspective of customers converse chucks are not shoes they get freedom to walk on outside by the difference of wearing converse.
  • 12. ACTUAL PRODUCT BENEFITS Actual product benefits include features, design, packaging, brand name and quality level. All together these benefits support the core benefits to satisfy customer. Actual product benefits carry product far more than just being a problem solving.
  • 13. Features: At the birth of converse they are basic shoes after the takeover of the Nike Converse has become focused on fashionable styles. Design: Generally black, white and red rubber toes, a blue label on the back “Made in USA” after Nike 12-people design team work Packaging: basically not applicable just shoe boxes Brand Name:”Converse All Stars” known as “Chucks” Quality: Basic shoes and also qualified by NBA
  • 14. AUGMENTED PRODUCT BENEFITS Augmented product benefits involve that installation, warranty, delivery and credit after sale service. Converse offers additional customer services to satisfy its consumers. It allows customers to design their own converse.
  • 15. QUESTION 2: When Converse outsourced production of its shoes to India,it entered into a licensing arrengement. What are the benefits and risks of that action? Do you think it has helped or hurt the company? The brand?
  • 16. BENEFITS OF ACTION 1.Cost Reduction 2.The possibility of utilizing cheaper labor cost 3.Possibility of getting into new markets easily 4.Less promotional effort for Indian markets 5.Increase productivity by restructuring itself
  • 17. RISKS 1.The loss of “Made in USA label leads to an uncomfortable situation in the organization 2.Possibility of emerging new competitors “imitators” 3.Uncertainties about new manufacturing place 4.Change of organizational structure “resistance” 5.New product line All stars 2000 can be a “venture”
  • 18. COMMENT ON ACTION Although sending manufacturing to India poses considerable risks All Stars 2000 collection has become successful. It has helped company to recover a little bit. The brand also renewed by the All Star 2000 collection
  • 19. QUESTION 3: What are the sources of brand equity for both Converse and Chuck Taylor All Stars?
  • 20. Official shoe of NBA Kurt Cobain and famous stars wear it Accepted by all social classes Have loyal costumers who don’t wear any sneakers except for Converse Make the foot relax  Before 1990: “Made in USA” A lovemark Sponsoring Olympics Retro trend and punk rock movement Affordable
  • 21. QUESTON 4: Analyze the Nike-era direction of Converse. (a) Assess the benefits and risks of the fashion and performance strategies individually, and of the combined two-tiered approach. (b) What targeting and positioning would you recommend for the Converse brand in the future?
  • 22. Before Nike to rescue, company had 180 employees and the sales of 185 millon dollars. „Dying brand‟ Nike observers believed that Converse should become a second tier brand.  Nike raises promotional expenses from $4 million to $17 million in 2005 However, Exeter Brand Group filled that gap which is selling cheaper shoes Wal- Mart and Target.
  • 23.  The popularity of Converse in basketball areas was falling down until Nike signed agreement with Dwayne Wade under the “Wade” collection and then gained its popularity again with promising sales. Wade bundled with a special edition of the classic Converse Pro Leather. This idea comes from “Dr. J” Erving
  • 24. Benefits:  Market share increased  Wide range of Converse types enable costumers to choose comfortably  12 person design team improves quality and enlarges the models  Entering into clothing fields can be benefical because of reaching much more costumers.
  • 25. Risk: Old fans of Converse dissatisfied with the new image .There is a possibility of losing Chuck Taylor customer base.
  • 26. Comments&Recommendations After Nike takeover of Converse Converse brand has gone under substantial change and became more fashionable therefore possible targets for Converse should be Upper class society who responses more pricey models correctly Tennis players and athlets :Main focus just basketball players
  • 27. Converse In Turkey 1987: Conteks has the selling license of Converse 4th in Europe (After France, Italy, Germany) Target Market: Teenagers 15.000 sales in 2001 1.300.000 sales in 2007